When it comes to spreading kindness, there’s no better place to start than with your own children. Instilling a healthy sense of right and wrong in your kids at an early age means they’re likely to continue those habits and share the inspiration with others into their adulthood. I’ll save a deeper discussion on value building for another time but there’s a good reason why I’m equating money with kindness - philanthropy. Wealthy people benefit poor people through their charitable contributions and the creation of jobs. The problem, of course, is becoming wealthy enough to benefit anybody.
In hindsight, I’m completely baffled by the lack of monetary education I received growing up. When I reflect on my time in school I can’t help but wonder why nobody ever invested the time to teach me about dollar cost averaging, IRAs or the magic of compounding interest. I find myself wondering where I’d be today if somebody had taken the time to make finances and investing entertaining. The most I received (and many of you can likely relate) is a constant reminder that money doesn’t grow on trees. Now imagine if, instead of brow-beating us with negative commentary with no real tangible learning value, somebody had taken the time to use positive lessons to teach us the value of a dollar. A modest savings challenge presented by a parent or teacher would have meant one heck of a head start on retirement today. Why not give your kids a head start and empower them with some lessons that will truly benefit them - and others by extension - down the road?
A fun example would be to point out that average retirement age when they grow up will likely be in the 70s. Then explain to them that if they invested just $5/week earning around 10% for 40 years, they’d end up with $506,325.88 on their $41,600.00 investment. You can go play with Money Chimp’s compound interest calculator and plug in your own numbers if you like. If they’re excited enough by the $5 per week, make it more exciting by offering to match whatever they save at 25-100% like a 401k (further building on their financial maturity and preparing them for life in the working world.) Then plug in the new numbers and watch their eyes light up. The point is, they are learning about money and investing. The more fun it is, the more successful they are likely to be.
Whoever said that money is the root of all evil likely didn’t have much of it or lost a lot of it. I’ll also bet the extent of their monetary education involved their father reminding them over and over again that he wasn’t made of money. It is a kindness to ensure your child’s financial independence and, since you won’t be around forever, the best you can do by your child is to make sure they will be able to take care of themselves without you. A child with a good understanding of the value of money and what it takes to make it is more likely to be sensible about his spending and saving. More importantly, he’ll be far better positioned to help others.
